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Lets look at the current situation;
Gold hasn't changed since last Wednesday. We had the PRE NFP drop to 1350 and then the POST NFP FLush 1 -- clear the stops on the downside, and Flush #2 clear the stops on the upside. Then we had a rally back to 1375 for good measure and a return to where we started on Monday. Thus nothing has changed from the NFP report as we enter Tuesday. So we do have a double top in the noted resistance we have been using 1372-1388, and that is a short term caution flag. A move above 1375 will favor a test of 1388 and that's the key number.
 
IF we push out a bit we can see the entire rally. This channel line is resistance 1372-1388. There's one other at 1410-1422. From an Elliot Wave perspective it is possible we are completing wave 5 here, but be aware, it doesn't have to be here. But the channel line does need to be respected. The nearest strong support is 1299-1308 (also 1322). The key is the upper line. IF we close above 1388 then prices will move above 1400.
IN summary, this is strong support that needs respect. It can be broken above 1388, but i think the odds favor sideways to lower for the short term cycle. Let's go to that chart.
Gold Cycles
Short term gold cycles inverted before Brexit and after. Double inversions are rare but the markets have become so jittery that it's to be expected. I've seen about 1/2 dozen inversions like this over the past decade. If gold can move sideways to lower into the BLUE CYCLE IT WILL BE BULLISH for gold. However if we exceed 1388 (the upper trend line) then favor higher to the 19th.
Gold Medium Term
Finally, gold is up against the 2011 downtrend line. This is the most important resistance in gold so a pullback from this area would not be a surprise. If gold breaks this line, then look for another strong leg up. Here too the 1388 area looks like a key point.
Summary
If the short term cycle is correct, then gold should be sideways to lower this week and then make a low next week. Above 1375-1388 means the cycle will move higher into the blue cycle.
Brexit is not the CAUSE of all this in markets, but it is the SPARK THAT HAS LIT THE FUSE. Expect strong volatility in markets.
Finally, short positions are at a record high. Their either about to really get stuffed, or win a short term victory. Let's wait and see if gold can continue lower into the blue cycle. If we get above 1375-1388 odds will favor higher to the next blue cycle.
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